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Kuwait Favors OPEC Production Cut Extension For A Whole Year

Kuwait wants the OPEC deal extension to span a whole year,, as opposed to six months or nine, according to comments by the nation’s oil minister at the bloc’s headquarters in Vienna, Austria.

Either the extension lasts 12 months or the cuts deepen to 1.8 million barrels per day, minister Essam al-Marzouq added, just ahead of OPEC’s official quarterly meeting on Friday.

All options “should be on the table,” al-Marzouq told the International Business Times when asked to specify the preferred option for Kuwait. Both avenues have been informally discussed with other members of the bloc, he said.

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Saudi Arabia and Russia agreed earlier in May that a nine-month extension of the November output reduction deal would be ideal. A formal decision regarding the future of the cuts, which began in January, is expected tomorrow afternoon in the Austrian capital.

Iraq has suggested that Nigeria and Libya, two OPEC members that have been exempt from production quotas due to their domestic strife, be included in future cuts. The two African countries have seen production rise dramatically in recent months as they continue to get their internal affairs in order.

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Including the duo would allow OPEC to cut output by 1.8 million bpd, according to Iraqi oil minister Jabar Al Luaibi.

The Joint OPEC/Non-OPEC Ministerial Monitoring Committee (JMMC), which helps OPEC coordinate with the 11 oil-producing nations who also agreed to limit their output by a total of 600,000 bpd, recommended a nine-month extension, according to Zero Hedge.

“The JMMC considered several scenarios…regarding the extension of the Declaration of Cooperation and decided to recommend that the production adjustments of the participating countries be extended for nine months commencing 1 July 2017,” read a leaked report. “In this regard, the JMMC should continue monitoring conformity levels as well as market conditions and immediate prospects, and recommend further adjustment actions, if deemed necessary.”

By Zainab Calcuttawala for Oilprice.com

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